On today’s episode of Good Buy or Goodbye, host Julie Hyman is joined by Threadneedle founder Ann Berry to discuss her top stock picks within the tech sector.
Berry recommends Palo Alto Networks (PANW) as a buy, highlighting the company’s strong positioning in the cybersecurity market. She notes that businesses are increasingly seeking to outsource their "cybersecurity solutions from one place," and Palo Alto’s business model caters to this demand. Additionally, Berry emphasizes that the company has forged "big strategic relationships" and secured contracts with multiple prominent enterprises, such as United Healthcare (UNH) and IBM (IBM). Furthermore, Palo Alto boasts an impressive 37% free cash flow margin, which Berry believes could facilitate strategic acquisitions and fuel future growth.
On the other hand, Berry names PayPal (PYPL) as a stock to avoid, citing concerns about the company’s lack of an execution strategy. She argues that while PayPal "should be winning on gaining share," the new CEO has yet to implement or announce "a big, bold" strategy to drive growth and capture market share. Berry also notes that the company’s go-to-market tactics, which were once a strategic advantage, have surprisingly underperformed. Consequently, she believes that without a clear turnaround plan or strategic vision, PayPal will continue to lose ground to competitors in the highly competitive digital payments space.
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